Currency

NEws and views, trends and tactics, strategies, insights, advice, legislation, regulations and more.

By Jeff Heilman

Watchful Eye
on the Food Supply

isteria. Cryptosporidium. Shiga toxin-producing E.coli (STEC) O157:H7. Feverish and chilling just to mention, the threat of these and other foodborne pathogens found the national spotlight last year with cases involving peppers, spinach, pistachios and, most glaringly, the sickening of hundreds, some fatally, by Salmonella-tainted peanut products.

Heightening criticism over outdated regulatory and oversight standards was a collaborative 2008 report from the Centers for Disease Control and Prevention and other agencies finding little progress in preventing outbreaks of foodborne illnesses. As deputy director of the CDC’s Division of Foodborne, Bacterial and Mycotic Diseases Robert Tauxe noted, “We have reached a plateau in the prevention of foodborne disease and there must be new efforts to develop and evaluate food safety practices from the farm to the table.”

Both the House and the Senate have responded by developing food safety legislation. The House-passed bill—the Food Safety Enhancement Act of 2009—is a move that Patton Boggs managing partner Stuart Pape says “will attempt to change the paradigm” of food regulation. “This bill would give the Food and Drug Administration higher authority and responsibility over the national food supply, while clarifying for companies and suppliers across the industry their obligations to ensure food safety,” says Pape, a principal advisor to the Grocery Manufacturers Association, a leading trade group.

With the landmark bipartisan bill now pending in the Senate, Pape is optimistic about its passage into law. “Most people give it a high likelihood of making it to the finish line,” he says. “For consumer, industry and governmental interests alike, this bill is not about opposing causes but achieving a shared objective.”

Meanwhile, tainted food outbreaks persist. Among a number of 2010 recalls, a Missouri-based meat packer recalled 14,000 pounds of beef suspected of E. coli contamination, while Salmonella fears led Cincinnati-based The Kroger Co. to pull two onion soup and dip mixes.

Estate Tax

The Levy Breaks?

Among the provisions of the 2001 Republican-led tax-cut bill: phased reductions leading to a repeal of the federal estate tax in 2010. At present, that can mean a total exemption from inheritance taxes, depending on estate value.

So why do lobbyists for small businesses, farmers, construction workers and related constituencies, historically opposed to the estate tax, now want it back? Because in 2011, by law, inheritance taxes must revert to pre-2001 rates—for estates above $2 million per married couple, a scorching 55 percent.

“Lobbyists do not want the law reinstated per se, says Patton Boggs partner Rosemary Becchi, who represents various interests that could be affected by the changing laws, “but they are looking for a compromise.”

The push is on for exemptions below $10 million per couple with a 35 percent tax above that amount—and time is of the essence. “Changing the law becomes much harder the longer Congress waits,” says Becchi. And with Congress absorbed with health care and other priorities, anxious months ahead are certain.

Prime Time for Brazil

For decades, Brazilians and outside observers alike have wondered when this resource-rich South American nation would crest the tipping point and finally establish lasting global prominence. From all appearances, Brazil’s days on the verge may finally be over.

Kristin Wells, partner

Patton Boggs LLP

According to Kristin Wells, a public policy partner in Patton Boggs’ international group and an avid student of Brazil, the world’s fifth-most populous nation could never quite surmount its persistent economic, political and social challenges—until now. “Sustained reforms have effectively resolved the key fundamentals of Brazil’s political and financial systems,” says Wells, “and produced a functioning democracy.”

Among the first emerging markets to begin recovering from the recession, Brazil is economically and fiscally stable, distinguished by a rising GDP, robust public markets, investment-grade debt, striking industrial growth, foreign reserves and a solid reputation in world markets. Importantly, too, the Brazilian government is meaningfully addressing long-standing educational, income and social gaps toward solidifying a growing middle class and creating a skilled labor force.

It all points to Brazil’s drawing power as an investment destination, and hosting both the 2014 FIFA World Cup and the 2016 Summer Olympic and Paralympic Games can only heighten the appeal: From new airports to revamped transportation networks, many billions of dollars in new construction and infrastructure upgrades are planned.

“Even a small piece of the action can be immensely profitable,” says Wells, “but for foreign investors, getting in means engaging the Brazilian government.” The wrap of politics around both events is assured—and in a country where many large companies are family-run and business is still conducted at the personal level, she adds, “partnerships are paramount.”

Open Season

The U.S. Supreme Court’s recent decision allowing corporate and union funds to be used for independent efforts supporting or opposing individual candidates has opened up many options for political participation. The decision will significantly impact the 2010 campaign and those in the future.

Corporations, unions, trade associations, nonprofits and individuals are assessing the new tools that now enjoy First Amendment protections. These include independent expenditures urging the election or defeat of specific candidates; ads naming candidates close to an election; and unlimited voter registration, candidate comparison and get-out-the-vote messages about individual candidates.

“This landmark decision removes the barriers to corporate speech and ensures that independent speech plays a role in the election process,” says William McGinley, Of Counsel at Patton Boggs and political law blogger at expressadvocacy.com. “It provides for sharper advocacy or criticism of incumbents when voters are paying the most attention.”

The majority decision upholds disclosure and disclaimer requirements as well as the ban on direct contributions to candidates.

“Citizens United will increase the amount of political speech,” says Ben Ginsberg, partner at Patton Boggs. “However, the restrictions on how much candidates and political parties can raise from any one source places them at a disadvantage. Unless those limits are lifted, the election messages will become more and more driven by independent outside groups.”